Patelco Credit Union Appoints Erin Mendez as New CEO

Embattled Patelco CU, whose former president/CEO was embroiled in a complicated legal dispute with another credit union he had worked for, announced the appointment Friday of Erin Mendez, as the credit union’s new president/CEO.

Mendez, who served as executive vice president and chief operating officer at the $9.7 billion SchoolsFirst Federal Credit Union Santa Ana, will assume leadership of the $4 billion Patelco Credit Union in Pleasanton, Calif. by mid-August.

She replaces former Patelco president/CEO Ken Burns who announced his resignation in March to pursue new challenges. Burns said the decision to resign between him and the board was “amicable.”

In April, however, Credit Union Times revealed the $1.7 billion Tech CU of San Jose had filed a complaint against Burns, who served as its president/CEO, over circumstances surrounding his 2009 transition to the CEO position at Patelco CU.

According to arbitration documents filed with the American Arbitration Association Employment Arbitration Tribunal from 2011, Burns was ordered to pay more than $466,000 in damages and additional $28,000 in legal fees to Tech CU to settle the credit union’s claims against him, which included breach of fiduciary duty and fraudulent concealment.

The arbitration documents showed that Burns applied for the Patelco job, which he got in 2009, while simultaneously and unbeknownst to the Tech CU board, was spearheading an effort to merge the two credit unions. The bid failed.

In addition to this legal dispute, Patelco was hit with a class action suit in January that accused the credit union of misclassifying dozens of assistant branch managers as exempt employees and failing to compensate them for overtime and missed meal and rest breaks.

According to an attorney for the plaintiff, former Patelco assistant branch manager Yuliya Clarke of Martinez, Calif., the plaintiff and other assistant branch managers worked long hours at the credit union without receiving any overtime pay and were never paid premiums for missed meal and rest breaks. The attorney, Oakland, Calif.-based Brian Schwartz, said Clarke also alleges the group spent most of their time on the job working on non-supervisory tasks, including day-to-day customer service and opening new accounts and auto loans.

The big California credit union also was one of a handful of credit unions hit by well-publicized DDoS attacks earlier this year that took down its website temporarily. A new CIO was soon hired, a move the credit union said had nothing to do with the website attacks.

Despite these issues, Mendez steps into the credit union’s corner office following Patelco’s record earnings last year. The credit union posted an 11.04% net worth ratio at the end of 2012.

“Patelco has long been known as an innovative leader in the financial services industry and I am honored to join the ranks of the prestigious few who have shaped Patelco into the trusted, growing financial institution it is today,” Mendez said. “I will be a diligent advocate for the safety and betterment of our members’ financial lives.”

She has spent more than 25 years in the financial services industry including 10 years at SchoolsFirst FCU. Mendez previously served as senior vice president of retail banking at American Savings Bank, senior vice president of operations and chief information officer for Western Financial Bank, and chief technology officer for Health Net Inc.

“Throughout our nationwide search, Erin Mendez stood out as a trusted, seasoned leader with a passion for serving members,” said Peter Hanelt, Patelco’s board chair. “She possesses a balanced mix of leadership experience, proven and tested financial acumen and innovative thinking that will provide the blend of practical skills and vision we view as vital to the future of Patelco.”